Shot Navy SEAL Loses Chance to Bid on VA Work

From BusinessWeek

by Kathleen Wheeler


Mark Lilly retired from the Navy SEALs with a Purple Heart, a Silver Star and five Bronze Stars after 23 years of service that included combat in Iraq and Afghanistan.

Lilly, who said he oversaw development of military bases overseas, decided to make construction his next career. His company, Chesapeake, Virginia-based Syncon LLC, has attracted both commercial and U.S. government work since its start in 2009.

It wasn’t enough to get Syncon certified as a veteran-owned business after the Department of Veterans Affairs questioned whether he had enough experience. His firm is one of thousands of small businesses rejected by the VA since the agency stepped up efforts last year to prevent fraud. Lilly, 47, said his case shows the process may be hurting veterans even as the government seeks to boost opportunities for returning troops.

“It’s really disheartening,” Lilly, who said he was shot twice during the same incident while serving in Afghanistan, said in a telephone interview. “As you go through military retirement, the VA says they encourage you to be an entrepreneur and that they’ll support you the entire time. Now I find out the VA could very well be my demise.”

The lack of VA certification has cost Syncon the opportunity to compete for as much as $5 million in contracts since late March, Lilly said.

VA Rejections

He said he’d hoped to double Syncon’s staff to 10 employees this year, and instead is working on a multiweek contract providing security and project-management services for an oil company in the Middle East to cover his company’s existing overhead costs.

“I should be ensuring my projects are on schedule and on budget,” Lilly said. “You can’t do that if you are in the Middle East doing a consulting assignment.”

The agency’s rejection of veterans is drawing scrutiny from lawmakers. The leaders of two House veterans subcommittees have asked VA Secretary Eric Shinseki to fix the verification process so decisions conform with “existing case law.”

The agency’s staff seems to “base decisions on a suspicion that an applicant’s documentation does not qualify, rather than clear evidence of disqualification,” Representatives Bill Johnson, an Ohio Republican, and Marlin Stutzman, an Indiana Republican, said in a July 11 letter to Shinseki.

Representative Jeff Miller, chairman of the House Committee on Veterans Affairs, said VA officials need to create a system that balances fraud-policing with fair treatment of veterans.

Congress Scrutiny

When the department “erroneously denies” qualified applicants, “it negatively affects our veterans who have worked hard to start a business,” the Florida Republican said. His committee has inquired about Lilly’s situation, he said.

Almost two-thirds of the more than 7,200 companies seeking status as being owned by veterans or disabled veterans have been turned down by the VA under a new verification program, according to March data from the agency. The department didn’t provide more recent data.

In one case this year, a veteran owner was initially turned down because he had been paid by the Department of Health and Human Services for two weeks of emergency relief work in Haiti. The VA initially said the stint made Kevin Treiber ineligible for the program that gives preference to veteran-owned small businesses as they compete for some contracts. It reversed its decision after Bloomberg reported on the case.

‘Limited Experience’

Other veterans have been rejected because of agency concerns about laws in California and eight other states where a spouse might be entitled to half a veteran owner’s share in a business.

The VA told Lilly last month he wasn’t eligible because his minority partner, who isn’t a veteran, has more construction experience. It noted that his partner’s resume said he was responsible for Syncon’s daily operations, in violation of the agency’s rules.

“You are attempting to use your limited experience in construction gained while serving in the military to state that you have enough experience to run the concern,” the Center for Veterans Enterprise, the VA office that grants the certification, wrote in a letter to Lilly.

The agency’s rejection was based on “statements in the applicants’ submissions related to responsibility for day-to-day management of the company, coupled with the vast disparity in construction experience,” Josh Taylor, a VA spokesman, said in an e-mailed statement.

Inspector General Report

Lilly said he manages the day-to-day operations and is responsible for the company’s long-term strategy.

His partner, Scott Turner, said his expertise is in the company’s residential and commercial business. While he handles some oversight of daily operations, he reports to Lilly, Turner said.

“He’s got the government construction experience, the connections and he leads the company,” he said. The two have known each other for 18 years, after meeting during martial-arts training, Turner said.

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